Payroll Tax Cut Fizzles; A Glimmer of Hope from China; Bernie the Spoiler

March 12, 2020

4 minute read

ANGER GROWS: We have never gotten as many angry emails as we received yesterday, from from readers who were “disgusted,” many said, by the inability of Congress to get anything done before leaving on recess. Members of Congress got an earful yesterday, so they may pass something before leaving town.

A PAYROLL TAX CUT still looks unlikely, as we reported yesterday, but embarrassed lawmakers may pass a modest bill in the next couple of days that would aid virus victims and help small businesses. Whether a House-Senate conference committee can agree quickly on this bill is unclear, but there’s a growing chance of a compromise by tomorrow.

TARGETED AID such as more generous unemployment benefits has widespread support, but Republican lawmakers are still cool to the idea of a payroll tax cut, as are many Democrats. If there’s acceptance of a major stimulus like that, it’s more likely to be a one-shot check of $1,000 to individuals and $500 for children — but something that bold, which the markets were hoping for, is not imminent.

OUR BOTTOM LINE hasn’t changed — the markets may be expecting too much from Washington on fiscal policy. There will be something, simply because Congress is too embarrassed to do nothing.

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A GLIMMER OF HOPE amid the gloom comes from China, of all places. There were only eight new cases of the coronavirus in Hubei provence yesterday, according to an article on this morning’s Reuters web site. “The peak of the epidemic has passed for China,” a government official stated. Travel restrictions have been eased and businesses are re-opening.

CHINA’S DATA HAVE BEEN SUSPECT, but reports of life returning to normal in the city of Wuhan are encouraging. And at some point, maybe in a couple of weeks, reports of new infections in Italy will level off. And at some time in April, a consensus may grow that the worst is over.

TOM HANKS AND RITA WILSON, ROLE MODELS: Perhaps they have provided an important message: they stated overnight that they have the virus. They had sporadic chills, fatigue and slight fevers; they’re both 63 and are likely to recover.

THE RISK, OF COURSE, is that people with the virus could infect older people who have serious medical issues — but for the vast majority of people who contract this disease, like Hanks and Wilson, it will be an annoyance, not a death warrant.

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BERNIE THE SPOILER: We talked with angry Democrats yesterday who think Bernie Sanders is betting on a Joe Biden gaffe in Sunday’s debate. Biden is not skilled debater, and often stumbles; Sanders is a pit bull. “Simply hoping for a Biden screw-up isn’t much of a strategy,” one Democrat told us yesterday.

EVEN IF BIDEN HAS A WEAK DEBATE, he’s the clear favorite to have a strong night on March 17; he’s favored to win Illinois, Florida and Ohio. Democrats have made their peace with Biden as the nominee; they believe — correctly — that he has a chance to win in November. Bernie does not.

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